Aspen Tech Violated Terms of Consent Order Related to its Purchase of Hyprotech, Ltd.

The Federal Trade Commission today announced that it will modify a 2004 order against Aspen Technology, Inc. to restore competition in the U.S. markets for several engineering process simulation software products. The Commission’s action comes after Aspen Tech failed to divest certain assets in a timely manner, as required by the 2004 FTC order. The Commission had determined to bring an enforcement action against Aspen Tech based on the order violations. However, Aspen Tech has now agreed to settle the order violation charges by complying with additional obligations imposed by the modified order.

The original 2004 order required Aspen Tech to sell certain software assets to Honeywell International, Inc., to resolve claims that Aspen Tech’s 2002 acquisition of Hyprotech, Ltd. was anticompetitive and violated federal antitrust laws. The 2004 order was intended to replace the competition lost through the acquisition. Aspen Tech did not complete the required divestiture on time, delaying Honeywell’s effective entry into the market, according to the FTC. Under the agreed-upon modified order announced today, Aspen Tech must take additional steps to fully restore competition in the affected markets. The modified order also requires Aspen Tech to submit to oversight by an FTC-approved monitor, which will help ensure that it complies with its divestiture requirements.

Case Background. On March 10, 2002, Aspen Tech announced that it was acquiring Hyprotech, its closest competitor in developing and supplying certain specialized engineering
process simulation software products. Aspen Tech consummated the transaction on May 31, 2002. The Commission issued its complaint challenging the acquisition in August, 2003, charging that the acquisition substantially lessened competition in several U.S. software markets in violation of the antitrust laws.

On July 15, 2004, before trial had begun, the FTC announced a proposed consent order requiring Aspen Tech to divest certain assets it obtained through the $106.1 million acquisition, settling the Commission’s charges. The order required Aspen Tech, among other things, to sell Hyprotech’s engineering process simulation software, and on December 24, 2004, the FTC approved Honeywell as the acquirer of these assets.

The allegations concerning Aspen Tech’s failure to comply with the 2004 order are set out in the Commission’s Order to Show Cause. A detailed summary of the Modified Order can be found in the FTC’s analysis to aid public comment, on the Commission’s Web site at http://www.ftc.gov/os/adjpro/d9310/index.shtm, and as a link to this press release.

The Commission vote approving the agreement containing the proposed modifying order, the appointment of the monitor, and the related Monitor Agreement was 3-0, with Commissioner J. Thomas Rosch recused. Commissioner Pamela Jones Harbour issued a separate concurring statement that can be found on the FTC’s Web site and as a link to this press release. The agreement will be subject to public comment, starting today and continuing through August 5, 2009. Written comment should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. To file a public comment electronically, please click on the following hyperlink: http://www.ftc.gov/os/2009/07/d9310publiccomment.pdf and follow the instructions.

NOTE: The consent agreement is for settlement purposes only and does not constitute an admission of a violation of the original order. When the Commission issues an order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $16,000.

Copies of the documents related to this matter are available from the FTC’s Web site at www.ftc.gov. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust@ftc.gov, or write to the Office of Policy and Coordination, Room 383, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/bc/edu/pubs/consumer/general/zgen1.shtm.